* Parliament to discuss tougher "Swiss made" rules next
* Watch federation rejects compromise advocated by lobby
* Watch industry set to benefit most from stricter rules
ZURICH, Feb 28 The Swiss watch federation said
it would leave business lobby economiesuisse for not backing
stricter rules regarding products bearing the "Swiss made"
label, stepping up pressure ahead of a parliamentary debate next
The move is likely to heat up the discussion about a
controversial draft law proposing that at least 60 percent of
the manufacturing costs of an industrial product stamped "Swiss
made" have to occur in Switzerland.
"Economiesuisse is blocking tighter rules for the 'Swiss
made' label," the watch federation said in a statement on
Current legislation says that only 50 percent of the value
of the precision-tooled inner workings of a watch, known as the
watch movement, has to be manufactured in Switzerland. There is
no law for other industrial products, but businesses use as a
reference a court ruling from 1968 saying that at least 50
percent of manufacturing costs have to occur in Switzerland.
The watch federation has criticised the existing rule as too
weak, saying it allowed for mainly foreign-made watches to be
sold as "Swiss made".
Economiesuisse, which says it represents 2 million
employees, said up until last year that it believed the 50
percent standard was enough for all goods. Recently it has said
it backs the 60 percent threshold for the watch industry but
does not want this rule to be imposed on other sectors.
Other Swiss business sectors - those less profitable than
the watch industry - are worried they will lose their "Swiss
made" tag if the rules get too tight because they will be unable
to afford to bring production back to Switzerland and pay higher
"Economiesuisse only started backing the 60 percent rule for
the watch industry in 2012 when discussions were already well
under way. That was too late, it has not really helped us," said
Jean-Daniel Pasche, chairman of the watch federation which has
spearheaded the move to tighten rules.
The draft law will be discussed again by Switzerland's lower
house on March 11 after a first round of debates in both houses
last year ended with a disagreement over how much Swiss value is
needed in a Swiss-tagged industrial product.
The lower house has so far backed the 60 percent rule, but
the upper house said 50 percent of Swiss-made ingredients were
Almost all Swiss watches bear the "Swiss made" label and
benefit from the considerable sales premium customers are
willing to pay for that label - up to 50 percent of the purchase
price for luxury items according to recent studies.
(Reporting by Silke Koltrowitz; Editing by Sophie Walker)